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A View from the Altar / Solyndra
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Solyndra

The Solyndra scandal tells you everything you need to know about green gadget energy: It cannot survive on its own.  Since it requires federal money to stay afloat, it aggressively spawns corruption.  The government orders people to build stuff nobody wants to buy.  With that as your business model, survival resides in the greasy palms of corrupt D.C. pols.

One of the great aspects of a truly free economy is that it automatically (and far less painfully) adjusts enterprises to fit their best use.  How would solar energy be used absent government meddling in the energy sector?  It would be a profitable business for certain kinds of niche markets.  Solar power is great for areas lacking grid access and that have small power demand and plenty of sunshine.  Think of a rich man who wants to light up his private Unabomber shack somewhere in the Sonoran Desert.  The nearest power lines are 100 miles away.  He doesn’t want to haul diesel fuel for a site generator and also doesn’t want the noise.  It’s a natural application for solarvoltaic power with battery storage, solid state inverters, and so on.  A free market would do this at price both buyer and seller could live with.

Mr. Obama has defended the Solyndra debacle by saying, “if we want to compete with China… we’ve got to make sure that our guys here in the United States of America at least have a shot.”  To Mr. Obama and his acolytes who know nothing about energy, this means setting up a big factory to build industrial scale solar panels.

But by stepping into the market to “give our guys a shot,” the government is actually taking their shot away from them.  To people operating in a free and self-disciplined market, it’s obvious that solar power will be a niche technology for the foreseeable future.  China has a command economy operated by lawyers, bureaucrats, over-promoted fighter pilots, and secret police.  These guys don’t know jack about energy, so they’re wasting billions on ventures that will definitely fail.  The Obama administration is aping the Chicom approach to economics, dumping unearned cash into an industry which will produce an oversupply of overpriced energy gadgets unsuitable for a legitimate end user.

By “unsuitable for the end user,” I mean devices that are scaled wrong for the customers who might actually need them.  The government wants companies like Solyndra to produce electricity on the power grid scale with tens of millions of watts.  The bona fide niche market for solar power can make use of a few thousand watts at most.  This is analogous to needing a pint jar of pickles, but somebody rigged the market so the only thing you can get is a 55-gallon cask.

You’d think we would have learned this lesson after five generations of government meddling in the housing market.  A hodgepodge of tax incentives, local land use restrictions, and elaborate banking schemes has given us an economy-strangling oversupply of overpriced housing combined with severe localized housing shortages.  Nationwide, there are about 20 million units of unoccupied housing, yet overall housing prices stubbornly resist realistic correction.  Meanwhile some communities remain so limited that hovels fit to be condemned in rural Georgia sell for millions in Los Angeles.  It takes a lot of stupid government fiddling to create such a warped market, but they’ve done it in housing.

Now the Obama administration is telling us this is the economic model they favor for developing the electric power sector.  It worked so well for housing, and besides, we have to do whatever the Communists are doing, right?  If they manage this like they’ve managed housing, Solyndra’s stupidity, waste, and corruption are the shape of things to come.

otherbrothersteve@gmail.com

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